When I first heard about the National Broadband Network I was excited, and who wouldn’t be with 100Mb (which is magically turned into 1Gb) access for all? Then the details started to filter down and over time my excitement has diminished to the point where now I personally think the NBN is a mistake, at least in its current form.
While the technology is exciting the price tag decidedly is not at approximately $5000 per household, and that is only the estimated price to build it (half of which is tax-payer funded). As with any government project we can expect the cost to increase, despite Stephen Conroy’s assertion that rollouts in Tasmania have been completed 5% under budget. On that note, why is it always Tasmania that sees new telecommunications technology rolled out to first?
After construction is complete, which won’t be for at least 10 years, we are expected to pay companies leasing the bandwidth from the NBN to use it. iiNet have already said that the approximate price will be $160 a month, which is a massive increase compared to what the majority of people pay now. So we’re put into huge national debt to build the NBN and then, once complete, are expected to incur personal debt to be able to make use of our investment.
One point concerning the NBN I take particular note with is that they plan to sell it after 10 years of operation. I completely oppose this and am amazed that this idea would even be entertained after the disaster that privatising Telstra has turned out to be. If we’re going to pay so much to build it we should at least get to keep it!
Claims that the NBN would help to decentralise the population are interesting, however while dreaming about our new superfast internet connections the most basic networking fact is always forgotten: network speed is always limited by the slowest connection. With the majority of content hosted overseas the international pipes will be completely saturated even with our ridiculous download limits that Australian ISP’s are in love with. Nothing is being said about increasing international bandwidth which leads me to believe that nothing is being done because if there was now is the time they’d be shouting it from the rooftops.
The Liberal Plan is not really a plan at all. It’s more a case of keep doing what we’re doing now because realistically, what is in that plan that we’re not already doing?
I welcome comments and discussion.
You’ve got me on this one. I don’t feel like I know enough to argue too strongly one way or another. My opinions on economic matters are influenced quite a bit these days by a number of economists I subscribe to. But they seem to be pretty torn about it themselves.
On one hand it’s a heck of a lot of money, and you could ask anyone on the street to give you any number of ways it could be better spent. As far as broadband goes, private enterprise would eventually get around to looking after the majority of the market by itself. (Albeit later, and probably by hitting all the “easy” areas, rather than the places that need it most.) But there’s no doubt there’s a risk of us spending a vast sum of money on something which it’s quite difficult to do a proper cost benefit analysis on. (Which is why I believe we haven’t seen one).
On the other hand, this election seems ridiculously over-focused on debt. There’s a great article about our debt here: ( http://petermartin.blogspot.com/2010/07/wednesday-column-debt-free-got-any.html ) It talks about how very few businesses and families operate without debt. That debt can be a great driver of growth, as long as it’s spent on the right things.
Things like infrastructure, that give short-term jobs and long-term benefit. Railways cost a lot of money to build too, but you hope to recoup the cost over a long period of time. During which time international links will (presumably) be upgraded quite a lot. Gigabit speeds are overkill now, but for how long?
I have no come-back on selling the NBN after 10 years. I think the argument goes that the problem with Telstra was that it was both wholesaler and retailer. And that the NBN is different because they will only be a wholesaler. But it still sounds like a monopoly to me. The government would want to be very careful with the legislation.
Lastly, there will undoubtedly be people who make good money from bidding for government contracts. But I don’t buy the argument a bad record on the BER program equates to inevitable dramatic overspend on the NBN. Two different independent reports have said there was some waste with BER, but nothing like the opposition has been claiming. And whenever you have to spend money that fast (and that was absolutely the point of the exercise – otherwise it would have been ineffectual), there’s bound to be more waste. The stimulus had to be spent fast, and I for one am glad it was spent on infrastructure rather than handed straight out in tax cuts as the Coalition wanted to do. The NBN will be managed in a vastly different environment than the BER, so I think it’s disingenuous for the Coalition to equate the two.
Thanks for the link Michael, I never really thought of debt in that way.
I would be fine with the NBN if they said it will remain goverment controlled, that the NBN’s only customers will be resellers (to avoid any sort of monopoly occuring), AND that the cost of our internet connections is subsidised (this point because it was our tax money that paid for half of it).
The good thing about being government controlled is that there are no shareholders pushing for greater and greater profits. They can break even and all’s good.
The market will determine who survives and who doesn’t from the resellers.